Statutory accounts, also known as annual accounts provide shareholders with an insight into businesses performance. They are also required by the Companies House and HMRC to keep your business records up to date.
Many businesses must complete these accounts which are based on financial records at the end of the financial year.
Who needs to produce statutory accounts?
All businesses must submit an annual financial account to Companies House. The complexity of this account will depend on the size of the business, and smaller businesses can complete less extensive accounts.
Small companies do not need to complete full statutory accounts and instead can send simpler abridged accounts to Companies House.
Companies are classified as small if they can satisfy two of the following:
- A turnover of £10.2 million or less
- £5.1 million or less on its balance sheet
- 50 employees or less
Micro-entities run reduced operations compared to a small business.
A company is classified as a micro entity if it can satisfy two of the following:
- A turnover of £632,000 or less
- A balance sheet with £316,000 or less
- 10 employees or less
If your company is a micro entity, you will be entitled to the same exemptions as for small companies and will prepare basic accounts and a balance sheet with less information.
Although these accounts are simplified it doesn’t make the task of composing them an easy one. For people who are unfamiliar with financial accounting, this process can be daunting.
We offer support to smaller businesses to ensure their annual accounts are just as accurate and professional as those submitted by larger corporations.
Our clients can feel confident about their financial records, without feeling fear-full about unforeseen costs (e.g. penalties) which could devastate a small entity.
Smaller companies can:
- Complete simpler abridged accounts
- Choose whether to include a director’s report
- Choose whether to include a profit and loss account
- Exempt their company accounts from being audited
The following are included within statutory accounts:
- A balance sheet (showing the value of company assets on the last day of the financial year)
- A profit and loss account (includes sales, costs and profit/loss)
- Notes about the accountants
- A directors’ report (micro entities are exempt)
- If your company has audits the auditors’ reports must also be included.
Statutory accounts must adhere to either of the following standards:
- International Financial Reporting Standards
- The new UK Generally Accepted Accounting Practice (GAAP)
More Group has years of experience dealing with statutory accounts. We are knowledgeable about the standards framework and will use this proficiency to ensure your statutory compliance.
Risks involved with inaccurate statutory accounts
In recent years, changes in the UK GAPP have increased the risk of submitting incorrect accounts.
A late submission could set your company back by up to £1,500 depending on the length of delay.
In addition to penalties, mismanaged statutory accounts could result in your business overpaying tax or losing some credit rating.
Working with a professional accountant, such as More Group, will mitigate these risks and maximise your business’s profitability.
How we can help you
More Group can assist businesses of all sizes in completing annual statutory accounts.
We know how valuable our clients time is, so we are proud of how efficient we are when we take care of their financial accounting.
Our experts can ensure your statutory reports will be completed accurately, so you can feel confident your company finances will run smoothly.
Contact us for professional advice on your business’s accounting needs.